The beginning figure is: Net Profit / Loss per accounts. Then, to this figure,

add:

depreciation,

remuneration to business owners (for unincorporated business),

domestic or private expenses (for unincorporated business),

non-deductible contribution to retirement scheme (for unincorporated business),

expenses or losses of a capital nature,

less:

gain on disposal of fixed assets,

dividends income ,

non-assessable profits (e.g. those do not have a Hong Kong source),

cost of computer hardware and software,

cost of patents ... etc.,

cost of manufacturing plant or machinery,

depreciation allowance of plant and machinery ,

Industrial Building Allowance ,

Commercial Building Allowance ,

tax loss brought forward ,

and the balance (if positive) is Assessable Profit.

Tax payable = Assessable Profit * Tax rate

(Tax rate for corporation: 17.5%; for sole-proprietor and partnership business: 16%)

If the balance is negative, it is called tax loss which is to be carried forward to set-off the next year's assessable profits.